Wednesday, 25 May 2016

Twitter Pulls Back from On-Platform Buying – Do Consumers Want to Buy on Social?

According to a new report from BuzzFeed, Twitter has disbanded its 25 member commerce team. The group had primarily been working on Twitter’s ‘Buy Button’, which it was envisioned would eventually enable one-click shopping on the platform, as well as their experimental ‘Products Pages’ which were in testing phase via some verified profiles.
The reason behind the decision? Twitter’s shifting its focus from efforts that haven’t generated significant results and re-allocating resources to other areas – several staff members from the commerce team have been let go, while those remaining have been switched to the customer service and dynamic product ads teams. Dynamic ads, which enable advertisers to serve Promoted Tweets to users based on products they've recently viewed on their website, have proven quite successful - according to Twitter, dynamic product ads are averaging 2X the click through rates and conversions of regular promoted tweets. And that makes sense, reaching people with, essentially, retargeted ads is more effective because they’ve already shown a level of interest in your offerings by visiting your website - but why the shift away from on-platform buying?

There was a time where on-platform purchasing was seen as the next big social trend. So what’s changed? And what does that mean for social eCommerce?

Changing Focus

In some respects, Twitter's change in focus seems more platform-specific, as opposed to a wider shift.

In an interview with the BBC this week, Twitter CEO Jack Dorsey outlined the company’s revised priority focus, which is as follows:

Refine and Simplify the Product Maximize Live Video Encourage More Creators to the Platform Ensure Users Feel Safe to Express Themselves Work with the Development Community

As such, the shift away from on-platform buying options likely falls under the first point, in simplifying and refining their product. It’s no secret that Twitter’s in a tough spot, and that they need to produce results – obviously they weren’t seeing enough early indicators from on-platform purchases to maintain it as a focus.

But the wider question now is, are other platforms seeing similar?

According to one Twitter commerce insider who spoke to BuzzFeed:

“People aren’t buying on social media right now. They’re still buying, for the most part, on mobile web.”

If that’s true, and it’s not just Twitter failing to see much traction in on-platform purchases, then that’s a significant concern, particularly for Pinterest. Pinterest’s been putting big focus on their on-platform shopping options, introducing Buyable Pins and working with major platforms like Shopify to provide more immediate shopping options for businesses.

In fact, as we’ve noted before, Pinterest is now shifting further away from being a social network and more towards becoming a dedicated eCommerce platform – currently over 75% of saved Pins come from business profiles. Last year, the platform projected that it would be generating $2.8 billion in revenue by 2018, a sharp rise from the reported $169 million it made in the year just gone, and a big part of that growth is projected to come via their eCommerce options. If Twitter’s findings are right, and it’s not a trend isolated to their platform alone, Pinterest could be facing an uphill battle.

And then there’s Facebook’s latest efforts to get more people to buy products and communicate with brands via Messenger. It’s a slightly different proposal, in that it’s more intimate, and likely ‘feels’ more secure as a result, but if people have shown little enthusiasm for buying on Twitter, it could also raise a flag on that front.

Not Getting Buy-in?

In terms of actual numbers, Pinterest hasn’t revealed a lot about how their Buyable Pins are performing. In September last year, three months after launching the offering, Pinterest reported that the option was definitely helping with customer acquisition - a finding which they again underlined in a blog post published in March, in which Pinterest noted that:

“We surveyed hundreds of sellers after the holidays and they told us that between 84-100% of their sales from Buyable Pins came from customers new to their business.”

Which is great, but it doesn’t say much about the wider response - how many of Pinterest’s 100 million monthly active users are actively clicking on that ‘Buy it’ button?

Some brands who’ve activated Buyable Pins have reported up to 30% sales growth on the back of the function, but again, it’s anecdotal and not enough to establish any real measure of overall performance.

Over at Facebook, they’ve still not perfected one-click buying, though it’s an area they’re looking into.

American users have been able to share money via Messenger for some time, but Facebook’s not at the stage where the functionality's being directly integrated into the commerce process.